Licensing – FAQs

Why does the University patent, market and license inventions?

The primary objective in developing a patenting and licensing strategy for an invention is to support the research, education and public benefit mission of the University.

What is included in most Stevens License Agreements?

A license agreement gives rights to use a technology for further development towards commercialization. License agreements typically include the following business elements:

Degree of exclusivity: Licenses are available as nonexclusive, exclusive, or restricted by field of use, depending on a company’s need and resources. Similarly, licenses can be issued world-wide or restricted to a particular geographic location

License Fee: License fees are paid once the license agreement is signed. The amount depends on the value of the technology

Patent Reimbursement: Patent reimbursement fees are paid to the University by a licensee in order to defray patent processing costs. Domestic and foreign patent filing fees, intellectual property attorney's fees, and any late fees are all captured by the patent reimbursement fee.

Development Period with Milestones and Payments toward Commercialization: When a technology requires extensive development, our license agreements will provide for a development period. This means the licensee will be asked to submit a development plan that outlines the work planning to be done during the development period. Thereafter, the OIE verifies to confirm progress towards the developments and milestones in the licensee's commercialization plan. Frequently, those milestones will specify milestone payments. Milestone payments help reduce initial license fees on high-risk projects since these milestone payments are made only when the milestones are achieved.

Royalties: Royalties are paid when products that use the technology are sold. Royalties may be calculated on a percentage-of-sales, gross or net sales of product, or fee-per-unit basis, depending on the standard in that market.

Minimum Annual Royalty: At the end of any internal or external development periods, we will expect an annual minimum royalty. Any royalties actually earned will be credit toward the minimum royalty, so the minimum royalty is normally not an additional fee. Minimums encourage active marketing of each technology.

Can Stevens accept equity in a License Agreement?

The university equity policies apply if the university receives equity in consideration of licensing the invention to the start-up company. University equity policies and guidelines generally state that the university may accept equity as partial consideration for technology licensing in appropriate circumstances. These policies are in place in recognition that small or start-up companies may find it particularly difficult to commit significant cash outlays for both developmental and licensing costs. In such cases the university may accept equity, in lieu of cash, for license fees. When accepting equity, the university seeks to hold a position of 10% ownership or less in a licensee at the time that the licensee becomes a publicly traded company. The university will not hold a position on the board of directors, and will not exercise voting rights, but may exercise observer rights on the board of directors.

Reasonable Expectations

In the end, many technologies patented by the OIE are never licensed and many of those that are licensed never pay royalties exceeding their patent costs. Part of this is because the OIE accepts a large percentage of the disclosures it receives for patenting provisionally. Many universities can risk patenting only the top 10 percent of the technologies they receive as disclosures...or not patent any of them unless a licensee can be found to pay the patent costs. Moreover, while some technologies are licensed within a relatively short time, others need more time to let the market catch up with the technology. Sometimes it is the second license negotiation that works for everyone.

How do inventors share in the benefits of licensing agreements?

Stevens inventors receive a share of the net royalties and fees from licensing (including equity), in accordance with the Stevens Patent Policy. Royalty payments to inventors are made annually based on the preceding fiscal year income, expense, and reimbursement. If you have questions about income associated with the commercialization of your invention, please contact the OIE and we’ll be happy to discuss it with you.

Can I continue to do research on the technology on which my startup is based?

Yes, though there may be conflict of interest limitations on the research being conducted. Researchers are not permitted to use Stevens resources (e.g., laboratories, equipment, funding, personnel) to develop technology for the primary purpose of benefiting a startup. Subject to disclosure and review of a potential conflict of interest, Stevens researchers are generally permitted to receive research funding from their startups, pursuant to a Sponsored Research Agreement negotiated by OIE. Conflicts aside, Stevens will have the right to use the invention in research. In Stevens license agreements, Stevens always reserves the right to use licensed inventions for non-commercial research purposes. Once licensed to the startup, the invention likely can be used at Stevens for research purposes only.

Do I have to leave my position as a faculty researcher for a company to be formed around my technology?

No. In fact, most faculty members choose to remain in their positions at the University, doing what they do best—new research and teaching. Instead, faculty members typically take an advisory role or join the scientific advisory board (SAB) of the new company, once a management team has been formed. Often, an entrepreneurial student, technician, PhD, or post-doc who worked under the PI may decide to join the company full time upon graduating or completing his or her program, in order to carry forward the commercialization efforts of the technology.

How does OIE market disclosed Stevens inventions?

Once your invention has been disclosed to the OIE via an invention disclosure form, and some form of IP protection has been initiated, the OIE will help with:

Direct Personal Contacts Before a technology is licensed, your licensing officer will discuss the technology personally with the potential licensee. Frequently, the first meeting will be the result of a telephone contact and visit to the licensee. This helps to clarify interest early in the process and enables the licensing officer to meet many of the individuals who are interested in the technology from various perspectives.